Contract price adjustment for cost fluctuation Contracts awarded under Transfund New Zealand's CPPs may specify that amounts payable under the contract will be adjusted in line with a Transfund formula (refer sections 3.6.1 and 5.6.1 of this Manual).
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Derivation of cost adjustment factors The Transfund price adjustment formula uses indices published by Statistics New Zealand plus a Bitumen Price Index calculated by Transfund. These indices are combined, using appropriate weights, to produce cost adjustment factors (Table 1) for five different categories of work. The Statistics New Zealand indices used are: •
Labour Index.
•
Producer Price Index (Construction, Transport and Storage, Road Transport, Non-Metallic Mineral Production).
•
All Farming Inputs Price Index (Fuel and Oil).
•
Consumer Price Index (Private Transport).
Table 2 shows the Statistics New Zealand indices used in the price adjustment formula. Table 3 shows the Bitumen Price Index used to calculate the “Revised Reseal” cost adjustment factors. F3
Use of cost adjustment factors The amount payable under a contract is multiplied by a cost adjustment factor, taken from Table 1. Table 1 shows cost adjustment factors for the different categories of work. Take care to use the correct line in the table, corresponding to when tenders closed, and the correct column, corresponding to when the work being paid for was done.
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Publication of cost adjustment factors and indices Tables 1, 2 and 3 are updated quarterly. Updated tables are published on the Transfund New Zealand web site (www.transfund.govt.nz).
Table of weights The table below gives the weights applied to the Statistics New Zealand indices and Transfund’s Bitumen Price Index, to calculate the cost adjustment factors shown in Table 1.
Derivation of the Bitumen Price Index Transfund’s Bitumen Price Index, calculated monthly, is based on: •
The average monthly spot price for Singapore HSFO 180, published by Platts Asia-Pacific.
•
The average monthly $US/$NZ exchange rate, published by the Reserve Bank of New Zealand.
The Bitumen Price Index for any given month is calculated as follows. BPI(this month) = [(HSFO(previous month) x ($US/$NZ(previous month) x 1.35) – Jan 95(base) + 410] x (1,000/410)
Using actual values for August 2001: BPI(Aug 01) = [(131.9716 x 2.4468 x 1.35) – 204.59 + 410] x 1,000/410 = 1,564
Points to note about calculation of the index are: 1
A lag of one month is used. That is input data from this month determines the index for next month.
2
The initial (January 1995) “raw” index value (410) is the New Zealand Refining Co list price for bitumen, in NZ dollars per tonne, at that time.
3
Each month the “raw” index changes by 1.35 times the $NZ change in the Singapore HSFO 180 price for that month.
4
The actual index is calculated from the “raw” index by raising to a base of 1000 (at January 1995) and lagging one month.
TABLE 1: Continued PART 2 – CONSTRUCTION Quarter in which Quarter to which contract price is being updated. tenders closed Mar '01 Jun '01 Sep '01 Dec '01 Jun '98 1.1269 1.1298 1.1331 1.1271 Sep '98 1.1233 1.1262 1.1295 1.1236 Dec '98 1.1223 1.1251 1.1284 1.1225 Mar '99 1.1234 1.1262 1.1295 1.1236 Jun '99 1.1194 1.1223 1.1255 1.1196 Sep '99 1.0989 1.1016 1.1049 1.0997 Dec '99 1.0810 1.0836 1.0869 1.0822 Mar '00 1.0625 1.0650 1.0684 1.0641 Jun '00 1.0488 1.0513 1.0547 1.0508 Sep '00 1.0231 1.0255 1.0289 1.0256 Dec '00 0.9897 0.9921 0.9955 0.9927 Mar '01 1.0000 1.0025 1.0058 1.0023 Jun '01 1.0000 1.0033 0.9999 Sep '01 1.0000 0.9965 Dec '01 1.0000 Mar '02
Please note – the latest values of these adjustment factors can be found on the Transfund New Zealand web site (www.transfund.govt.nz) Transfund’s CPP Manual Volume 1 Manual Number: PFM3
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Amendment No 39 Effective from: 30 June 2002
Appendix F
TABLE 1: Continued PART 4 – REVISED RESEAL
Please note – the latest values of these adjustment factors can be found on the Transfund New Zealand web site (www.transfund.govt.nz)
Please note – the latest values of these Statistics New Zealand indices can be found on the Transfund New Zealand web site (www.transfund.govt.nz) Transfund’s CPP Manual Volume 1 Manual Number: PFM3
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Amendment No 39 Effective from: 30 June 2002
Appendix F
TABLE 3: BITUMEN PRICE INDEX Quarter
Bitumen Price Index
Mar '98
906
Jun '98
936
Sep '98
904
Dec '98
994
Mar '99
885
Jun '99
981
Sep '99
1133
Dec '99
1369
Mar '00
1417
Jun '00
1600
Sep '00
1638
Month Oct '00
1849
Nov '00
1990
Dec "00
1885
Jan '01
1546
Feb '01
1445
Mar '01
1544
Apr '01
1589
May '01
1653
Jun '01
1684
Jul '01
1608
Aug '01
1564
Sep '01
1596
Oct '01
1681
Nov '01
1517
Dec '01
1350
Jan '02
1383
Feb '02
1362
Mar '02
1427
Apr '02
1522
May '02
1603
Jun '02
1619
Please note - the latest values of this index can be found on the Transfund New Zealand web site (www.transfund.govt.nz). This index is calculated by Transfund and uses the Singapore High Sulphur Fuel Oil (HSFO) 180CST cost as an input. Transfund’s CPP Manual Volume 1 Manual Number: PFM3
